Stablecoin issuer / redeemer in Albania

Law No. 66/2020 (not 110/2020) 'On Financial Markets Based on Distributed Ledger Technology' entered into force on September 1, 2020, and remains the primary comprehensive crypto regulatory framework in Albania, though the government may be developing supplementary legislation.

Mandatory. This is a cornerstone of Law No. 110/2020. Any entity wishing to issue virtual assets (including stablecoins) or provide related services (such as operating an exchange, custody, or advisory services for virtual assets) must obtain a license from the AMF.

Law No. 110/2020 defines "virtual assets" broadly as a digital representation of value that can be digitally traded or transferred and used for payment or investment purposes. It does not explicitly differentiate between stablecoins and other virtual assets based on their backing mechanism.

E-money: If a stablecoin meets the definition of e-money under Law No. 9918/2008 (i.e., electronically stored monetary value, representing a claim on the issuer, issued on receipt of funds for the purpose of making payment transactions), it would be subject to that regulation. The Bank of Albania would supervise this.

Securities: If a stablecoin's features grant rights akin to securities (e.g., profit sharing, equity ownership), it could be deemed a security under Law No. 9879/2008, overseen by the AMF.

Current Stance: The Bank of Albania has consistently stated that virtual currencies are not legal tender in Albania and are not regulated by it under the traditional banking framework, unless they perform functions typically attributed to e-money or payment services. The AMF, under Law 110/2020, would regulate the issuance and related services of stablecoins as a virtual asset.

Law No. 110/2020 does not specifically differentiate between collateralized and algorithmic stablecoins, but the overall Albanian regulatory framework (including Law No. 66/2020) now differentiates them.

Capital requirements for stablecoin issuers are tailored to the business model and risk profile of the issuer

Fit and proper tests: For management and shareholders.

AML/CFT compliance: Strict adherence to anti-money laundering and combating the financing of terrorism requirements, including customer due diligence (KYC).

Law No. 110/2020 does not specifically differentiate between collateralized and algorithmic stablecoins, but the overall Albanian regulatory framework (including Law No. 66/2020) now differentiates them.

For a stablecoin potentially classified as e-money, Law No. 9918/2008 grants clear redemption rights: e-money holders have the right to redeem the monetary value of their e-money at par at any time.

Legal Form and Capital: Applicants must be established as legal entities in Albania and meet minimum capital requirements, which are determined by secondary legislation issued by the FSA.

Segregation: Maintaining separate accounts for client virtual assets and funds from their own proprietary assets. This is a fundamental principle to ensure that client assets are not subject to claims from the DLT service provider's creditors in case of insolvency.

AML/CFT Compliance: Strict adherence to anti-money laundering and combating the financing of terrorism (AML/CFT) regulations, including customer due diligence (CDD), suspicious transaction reporting, and internal AML policies. These are primarily governed by Law No. 111/2019 "On Preventing Money Laundering and Terrorism Financing."

Article 21 (Client Asset Protection): DLT service providers, including custodians, are required to implement measures to protect the virtual assets and funds of their clients. This includes:

Law No. 119/2019 "On Preventing Money Laundering and Terrorism Financing" (Ligji Nr. 119/2019 "Për parandalimin e pastrimit të parave dhe financimit të terrorizmit").

Reporting Obligation: If a VASP knows, suspects, or has reasonable grounds to suspect that funds are the proceeds of criminal activity, or are related to terrorism financing, it must promptly (without delay) report this to the General Directorate for the Prevention of Money Laundering (GDPML).

No Threshold: There is no minimum monetary threshold for reporting suspicious transactions; any amount can be suspicious.

Natural Persons: Identifying and verifying the identity of the customer and any beneficial owner using reliable, independent source documents, data, or information (e.g., identity cards, passports, official residence documents).

Ongoing Monitoring: Conducting ongoing monitoring of the business relationship, including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile.

AML Officer: Appoint a designated AML/CFT compliance officer at management level.

A taxable event occurs when a cryptocurrency is disposed of, including crypto-to-crypto trades, triggering a 15% capital gains tax.

Tax Rate (Individuals): For individuals, capital gains from the sale of shares, financial instruments, and other assets are subject to a 15% flat rate under the Law on Income Tax. It is widely understood that gains from virtual assets would fall under this category.